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REUTERS – Gold prices slipped on Monday as the dollar firmed after a strong US payrolls report, overshadowing support from prospects that the Federal Reserve would pause its rate hikes this month.

Spot gold was down 0.4% at USD 1,939.19 per ounce, as of 0803 GMT, hovering near its lowest levels since May 30. US gold futures shed 0.8% to USD 1,954.40.

Gold prices dropped more than 1% on Friday after data showed US nonfarm payrolls rose by 339,000 jobs last month, exceeding a 190,000 forecast by economists polled by Reuters. But the unemployment rate surged to a seven-month high of 3.7% from a 53-year low of 3.4% in April.

The higher unemployment reading prompted markets to price in a 79.3% chance of the Fed leaving interest rates unchanged at its June 13-14 meeting, according to the CME FedWatch Tool.

“Money markets continue to favour a pause (as did comments from Fed vice chair nominee Philip Jefferson), so it may limit the downside for gold even if it has lost some safe-haven flows from debt-ceiling concerns… The question now is whether (gold) will break support at USD 1,934 to bring USD 1,900 into focus,” City Index senior market analyst Matt Simpson said.

Non-interest-bearing bullion tends to become less attractive in a high-interest rate environment.

The U.S. House of Representatives last week passed a bill to suspend the USD 31.4 trillion debt ceiling and averted a first-ever default.

The dollar index rose 0.2%, making greenback-priced bullion less affordable for overseas buyers.

Most Asian stock markets extended a global rally on Monday, while oil prices jumped after Saudi Arabia pledged big output cuts.

According to Reuters technical analyst Wang Tao, gold might revisit its May 30 low of USD 1,931.76.

Spot silver lost 0.8% at USD 23.40 per ounce, platinum edged up 0.1% to USD 1,004.66 per ounce and palladium gained 1% to USD 1,434.61.

(Reporting by Kavya Guduru in Bengaluru; Editing by Sherry Jacob-Phillips, Rashmi Aich and Sohini Goswami)

REUTERS–Oil prices jumped more than USD 1 a barrel on Monday after the world’s top exporter Saudi Arabia pledged to cut production by another 1 million barrels per day from July, counteracting macroeconomic headwinds that have depressed markets.

Brent crude futures LCOc1 were at USD 77.64 a barrel, up USD 1.51, or 2%, at 0014 GMT after earlier hitting a session-high of USD 78.73 a barrel.

US West Texas Intermediate crude climbed USD 1.41, or 2%, to USD 73.15 a barrel, after touching an intraday high of USD 75.06 a barrel.

Both contracts extended gains after rising more than 2% on Friday as the Saudi energy ministry said on Sunday its output would drop to 9 million barrels per day (bpd) in July from around 10 million bpd in May, the kingdom’s biggest reduction in years.

The voluntary cut pledged by Saudi is on top of a broader deal by the Organization of the Petroleum Exporting Countries and their allies including Russia to limit supply into 2024 as the group seeks to boost flagging oil prices.

The group, known as OPEC+, pumps around 40% of the world’s crude and has in place cuts of 3.66 million bpd, amounting to 3.6% of global demand.

“The move by Saudi Arabia is likely to come as a surprise, considering the most recent change to quotas had only been in effect for a month,” ANZ analysts said in a note.

“The oil market now looks like it will be even tighter in the second half of the year.”

Consultancy Rystad Energy said the additional cut by Saudi is likely to deepen the market deficit to more than 3 million bpd in July, which could push prices higher in the coming weeks.

Goldman Sachs analysts said the meeting was “moderately bullish” for oil markets and could boost December 2023 Brent prices by USD 1-6 a barrel depending on how long Saudi Arabia maintains output at 9 million bpd over the next six months.

However many of these reductions will have little real impact as the group lowered the targets for Russia, Nigeria and Angola to bring them into line with their actual production levels.

By contrast, the United Arab Emirates was allowed to raise output targets by around 200,000 bpd to 3.22 million bpd.

“UAE has been allowed to expand output, at the expense of African nations, which had their unused quotas lowered under the new agreement,” ANZ said.

In the United States, the number of operating oil rigs slumped by 15 to 555 last week, their lowest since April 2022, Baker Hughes Co said in its weekly report on Friday.

Drilling has slowed since December due to weaker prices, higher costs and as companies divert spending to repaying shareholders.

(Reporting by Florence Tan; editing by Diane Craft and Sonali Paul)

REUTERS — Asian shares extended a global rally on Monday on optimism the Federal Reserve would pause its rate hikes this month after a mixed US jobs report, while oil jumped as Saudi Arabia pledged big output cuts in July.

Brent oil jumped USD 1.82, or 2.4%, to USD 77.95 a barrel, while US crude  climbed USD 1.77, or 2.4%, to USD 73.51. Oil prices have recently come under pressure amid heightened concerns about China’s slowing economic recovery.

Oil rose as Saudi Arabia announced it would cut its output to 9 million barrels per day in July, from around 10 million bpd in May, the biggest reduction in years, while a broader OPEC+ deal to limit supply into 2024 also underpinned futures.

“With Saudi Arabia protecting oil prices from sliding too low … we think oil markets are now more prone to a shortfall later this year,” said Vivek Dhar, a mining and energy commodities strategist at Commonwealth Bank of Australia.

“We think Brent futures will rise to USD US85/bbl by Q4 2023 even with a tepid demand recovery in China factored in.”

On Monday, Japan’s Nikkei surged 1% to a 33-year high, Australia’s resources-heavy shares gained 1% and South Korea’s KOSPI rose 0.5%.

S&P 500 futures dipped 0.1% and Nasdaq futures dropped 0.3% in Asian hours, after a strong rally on Friday, driven by a mixed US jobs report, a resolution to the debt-ceiling issue and the prospect of a US rate pause this month.

The tech-heavy Nasdaq rose 1% on Friday and posted its sixth-straight week of gains that marked its best winning streak since January 2020, while the Dow Jones gained 2%, and the S&P 500 added 1.45%.

Data on Friday showed US economy added 339,000 jobs last month, higher than most estimates, bolstering expectations of Fed hikes in July, with markets tipping a 50% chance for that.

However, moderating wage growth and rising jobless rate in Friday’s jobs report argued for a case of pause in June.

Markets are still leaning towards a rate pause from the Fed at the next policy meeting, but have priced out almost any chance of a rate cut by the end of this year.

Yields on US two-year Treasuries surged 16.2 basis points on Friday to 4.503% and ten-years rose 8 bps to 3.6903%, in part driven by Fitch Ratings saying the US’ “AAA” credit rating would remain on negative watch, despite the debt agreement.

That in turn helped the dollar gain 0.5% on Friday and stay elevated at 104.16 against its peers early on Monday. The greenback jumped 0.8% on Japanese yen to 139.94 while the euro eased 0.5% to USD 1.0706.

The Australian dollar was an outperformer against a strong greenback, up 0.5% to USD 0.6605, on bets that the Reserve Bank of Australia will have to raise rates higher and for longer on domestic wage pressures.

The RBA will hold a policy meeting on Tuesday. In the wake of a strong increase in the minimum wages for the next financial year, markets are now split on whether it would hold rates steady or hike it further to 4.1%.

The Bank of Canada will meet on Wednesday. A majority of economists polled by Reuters expect the BOC to keep interest rates on hold at 4.5% for the rest of the year but the risk of one more rate hike was high.

(Editing by Himani Sarkar)

LONDON, June 2 (Reuters) – Oil prices rose on Friday after a US debt ceiling deal averted a default in the world’s biggest oil consumer, while attention turned to a meeting of OPEC ministers and their allies at the weekend.

Brent crude futures LCOc1 rose 77 cents, or 1% to USD 75.05 a barrel by 0806 GMT, while US West Texas Intermediate crude (WTI) CLc1 was up 69 cents, or 1%, at USD 70.79. Both contracts were headed for their first weekly loss in three weeks.

Markets were reassured by a bipartisan deal to suspend the limit on the US government’s USD 31.4 billion debt ceiling, which staved off a sovereign default that would have rocked global financial markets.

Earlier signals of a potential pause in rate hikes by the Federal Reserve also provided support to oil prices, not least by weighing on the US dollar, making oil cheaper for holders of other currencies.

Investor attention is now fixed on the June 4 meeting of the Organization of the Petroleum Exporting Countries and allies including Russia, collectively called OPEC+.

OPEC+ in April announced a surprise cut of 1.16 million barrels per day in April, but the gains from that move have since been retraced and prices are below pre-cut levels.

But signals on any fresh cut have been varied, with Reuters reporting and bank analysts indicating that further output cuts are unlikely.

On the demand side, the US Institute for Supply Management (ISM) said its manufacturing PMI fell to 46.9 last month, the seventh-straight month that the PMI stayed below 50, indicating a contraction in activity.

Manufacturing data out of China painted a mixed picture. Thursday’s better-than-expected Caixin/S&P Global China manufacturing PMI contrasted with the previous day’s official government data that reported factory activity in May had contracted to the lowest level in five months.

(Reporting by Shadia Nasralla; Additional reporting by Andrew Hayley; Editing by Susan Fenton)

Gold prices were set on Friday for their biggest weekly gain in nearly two months, as a softer dollar and hopes for a pause in the Federal Reserve’s tightening campaign bolstered bullion’s appeal.

Spot gold was little changed at USD 1,977.31 per ounce by 0726 GMT. US gold futures GCcv1 steadied at USD 1,994.50.

Bullion has gained 1.6% so far this week, heading for its best week since the week ended April 7.

Current gold market sentiment remains constructive, and prices could move a little higher from here as the Fed is expected to stay on hold in June, said Edward Meir, a metals analyst at Marex.

Philadelphia Fed President Patrick Harker said on Thursday US central bankers should not raise interest rates at their next meeting, even though high inflation is coming down at a “disappointingly slow” pace.

Markets now see a 71.5% chance of rates remaining unchanged in June. Gold, which does not yield any interest of its own, loses appeal when interest rates rise.

The dollar index dipped to a one-week low, making gold less expensive for buyers holding other currencies.

Meanwhile, the US Senate passed bipartisan legislation backed by President Joe Biden that lifts the government’s USD 31.4 trillion debt ceiling, averting what would have been a historic, first-ever default.

On the data front, investors will keep a tab on the US Labor Department’s non-farm payrolls (NFP) report due at 1230 GMT.

The figures could again sway “market opinion with regards to what the FOMC does next week”, said Tim Waterer, chief market analyst at KCM Trade.

A strong labor market print could see a bounce-back in the dollar, which would not help gold, Waterer added.

Spot silver ticked down 0.1% to USD 23.8783 per ounce, but headed for a weekly gain.

Platinum rose 0.8% to USD 1,013.90, and palladium advanced 0.3% to USD 1,398.30 – both set for weekly losses.

(Reporting by Arundhati Sarkar in Bengaluru; Editing by Subhranshu Sahu and Susan Fenton)